Canada’s remaining non-renewable energy resources are being sold off in an environment of low prices with minimal and declining returns to governments.
One might think British Columbia’s Auditor General would favour maximum information in financial disclosure. Apparently, not in this province.
Ministry’s cozy relationship with industry costs taxpayers billions
As is typical of resource management, the regulating ministry sees its prime purpose is to enhance growth and profitability of companies extracting resources. the public share of produced values is no longer material. This cozy relationship costs taxpayers billions of dollars, money that could be spent on renewable energy, transit, daycare, education or many other responsibilities of government.
The case is clear. British Columbia’s Government decided to reduce the public share of natural gas revenues to almost nothing. This is despite substantial growth in the quantities of natural gas being extracted.
Natural resource giveaway
British Columbia sees itself in competition with Alberta to attract gas exploration and production companies. As a result, both provinces have been in a race to the bottom. By giving away its natural gas resource, BC has reached bottom and through its plan to provide below cost electricity, the Horgan Government policy is to pay producers to remove this natural resource. Quite a change from the NDP’s promises before the 2017 election.
Paying $185,000 for each job
BC’s fossil fuel industry benefited from credits worth $902 million in fiscal year 2018 and $4.2 billion in the past five years. Each of the jobs in oil and gas extraction cost BC taxpayers $185,000. A similar amount spent on reducing dependence on fossil fuels would have been more effective in creating jobs and protecting the environment.
Hiding financial information and misleading the Legislature
Tax expenditures are subsidies delivered through the taxation system. These promote policy goals of government but are subject to far less scrutiny and disclosure than direct spending. The primary beneficiaries of tax expenditures are Canada’s wealthiest citizens and corporations. In British Columbia, natural gas producers, many with foreign ownership, are milking a very generous cash cow.
BC subsidies to gas producers: $8.6 billion, 2007-2017
Citizens of British Columbia are facilitating and subsidizing production of bitumen from Alberta tar sands. How’s that for an example of hypocrisy by a Government that claims it object to expanded shipments of dilbit through Vancouver’s inner harbour?
Unaffording the affordable
Some BC politicians are not bright. Either that, or they are thoroughly dishonest. Maybe both. Liberals saw natural gas revenues drop from $11.5 billion in the five years ended March 2011 to $0.8 billion in the five years ended March 2017…
Fugitive emissions and fugitive revenues
Between 2004 and 2017, the quantity of natural gas produced increased by 64% and the royalties, which once measured over $1.5 billion annually, disappeared.
Corporate interest outranks public interest
Many citizens — although not In-Sights readers — will be shocked to learn that credits owed natural gas producers soared by more than $1 billion from April to November 2018. That increase is two and a half times more than the total gas royalties received by government in the three fiscal years ended March 2018. The $3.2 billion balance owed to producers ensures that royalty revenues will remain at paltry levels throughout the Horgan Government’s present term.
The race to the bottom is over
In the fiscal years 2016 and 2017, natural gas royalty payments totalled $291 million. However, credits owed producers increased $748 million so, if the province bothered to record these obligations as was recommended by the Office of the Auditor General, the royalty account had a two-year deficit of $457 million. A decade ago, two fiscal years — 2006 and 2007 — produced gas royalty payments of $3.7 billion (2017 dollars) from substantially less production.
Hypocrisy of politicians exposed
Politicians demand ordinary citizens pay increasing amounts of carbon tax — supposedly to reduce fossil fuel consumption — while at the same time they dish out billions of dollars in subsidies to ensure gas companies produce more fossil fuels.
Billions of debts and unconscionable messes
A series of provincial administrations and the politicians and bureaucrats we-the-people employ have consistently lied to us by both commission and omission. By wilful blindness, they have put and are putting lives at risk…
Taxing and subsidizing carbon
While BC consumers of carbon pay an ever increasing tax — $10 billion since 2009 — carbon producers are enjoying billions of dollars in subsidies. In the fiscal years 2007 through 2017, natural gas companies quietly received benefit of tax expenditures worth almost $8 billion dollars…
Fossil fuel pollution we forget
After Canada’s federal government asked its energy regulator to examine broader environmental effects of the Energy East pipeline project by TransCanada Corp, including upstream and downstream emissions, the proponent, a company with substantial […]
Ending natural gas giveaways?
The four monthly auctions of gas rights held since John Horgan became Premier indicate the industry accepts it must pay more than it did under Christy Clark. However, the gas industry’s investment in Ms. Clark paid off handsomely while she sat at the head of the Liberal Cabinet table.
Before Clark, during Clark
When Encana’s founding CEO Gwyn Morgan became Christy Clark’s transition team advisor, natural gas producers knew they’d bet on a good thing.
After six years of Clark, we now see just how good that thing was for gas companies.
When regulators don’t believe in regulation
When a new government takes office, there is often a significant change at senior levels of the civil service and among OIC political appointments. One person still employed by the Horgan government may surprise more than a few people.
LNG facilities: siting, safety, regulation
When British Columbia conducts LNG negotiations behind closed doors, without public statements of principles or bargaining frameworks, citizens should worry. I have written about our government’s willingness to provide the gas industry with 9-figure production subsidies and Liberal aversion to collection of natural gas royalties but there is another subject to consider. It is the safety and security of LNG facilities…